Why we need a new green growth “stress test”
Manufacturers remain committed to tackling environmental and climate change challenges, but the UK must set itself on a road to “affordable decarbonisation”. This is the blunt message from the EEF’s latest manufacturers’ survey.
Faced with the rising cost burden of green policies, we’re calling for a new green and growth “stress test” – where all new and reviewed legislation is routinely assessed against these two objectives. If both objectives aren’t met, the legislation should not be passed.
We think things should be made a little easier for environment managers. For example many larger companies are required to report carbon emissions under four different schemes (greenhouse gas reporting, EU ETS, CRC Energy Efficiency Scheme and Climate Change Agreements), on four different dates, using four different conversion factors and for four different types of emissions. Let’s review the reporting schedule in its entirety and plan it better so that companies aren’t overloaded at certain times of the year and work isn’t duplicated.
EEF has argued that there need not be a choice between green and growth (as the CBI concurred a few weeks ago) but having the right policy framework in place matters.
In July, we published our survey of members examining their response to climate and environmental challenges. The results are clear: The government has yet to deliver the policy framework we need to deliver the vision of a green and growing economy.
UK manufacturers are among the most efficient in the world, at least according to recent surveys and analysis. Seven out of ten manufacturers have set environmental targets that are more ambitious then legislation in areas such as waste reduction, energy efficiency and water use. Manufacturers recognise that waste, be it resources and energy, represents money off the bottom line. They manage their impact because they recognise that leaner, more efficient operations are also more competitive ones.
Employee engagement and training is a key element of energy management – well over half of employers have increased employee training, or plan to do so in the year ahead.
Ironically, manufacturers see legislation targeting climate and environmental impacts as holding them back. The burden of differing and competing reporting demands results in more paperwork and less innovation. And the associated cost continues to rise. Just a few weeks ago the government’s own research showed that UK manufacturers in energy intensive sectors pay more in energy taxation and for climate change policy than anywhere else examined – and the situation is set to become even worse in future.
Just to be clear we absolutely agree with the overall objectives here, but we think these objectives can be met in a better way which works with the grain of manufacturing. Our members agree. The survey shows this area is suffering from an image crisis and needs drastic overhaul and streamlining to create the right incentive to meet the challenge in the most efficient way possible.
Finally, our survey shows that access to finance continues to hamper efforts to improve efficiency and cut waste, carbon and water use. We think there is a failure by government’s energy and climate change department, as well as the environment department, to grasp the challenge this will pose for companies, particularly SMEs. While a Green Deal for SMEs is welcomed, we need a broader debate on innovative financing models to deliver long-term green objectives.